Info

Commercial Real Estate Pro Network

Commercial Real Estate Professionals who work with Investors, Buyers and Sellers of Commercial Real Estate. We discuss todays opportunities, problems & solutions in Commercial Real Estate.
RSS Feed Subscribe in Apple Podcasts
Commercial Real Estate Pro Network
2019
November
October
September
August
July
June
May
April
March
February
January


2018
December
November
October
September
August
July
June
May
April
March
February
January


2017
December
November
October
September
August
July
June
May
April
March
February
January


2016
December
November
October
September
August
July
May
April
March
February
January


2015
October
September
August
July
June
May
April
March
February
January


Categories

All Episodes
Archives
Categories
Now displaying: October, 2019
Oct 31, 2019

Wealth Creation is all about mindset.  

Dovid Preil has worked in all different aspects of real estate, from mortgage brokering to multifamily syndication.  The through line he has found in all successful real estate investors is mindset.  

Importance of Mindset 

Mindset is based in knowledge and experience.  Without either, you are left with fear. The fear is a recognition of the risk, and risk is rooted in the probability of loss.  Fear of loss is powerful. It will keep you from the ability to take action. 

Risk 

That’s risky!  Investing in something you do not understand, is very risky.  Real Estate is not rocket science, but if you do not understand it and how you can lose, your likelihood of success is low.  When you don’t know what you are doing, and you follow the herd, you are waiting to lose. The solution is get educated.

Investor Mindset

The investor mindset is focused on how to invest and create wealth rather than spend an increase in income.  This is not limited only to people with a large salary. If your focus is to make more so you can spend more, your mindset is not focused on wealth creation, rather you are focused on consumption.  

Investors take the time to study a market so that they understand the market and the risk.  No asset is immune from loss, but real estate has historically been a great hedge against inflation.  Over time, it trends up, and unlike the stock market, it is not easy to push a button and sell. If you have a long enough runway, real estate will work out.

Wealth Creation

Wealth creation starts with a plan.  This plan has goals and with each goal accomplished, a new goal is set.  

Keys to Wealth Creation

  • Budget: When you live within your means and your budget, you create habits.  Habits become discipline. When you create a habit of saving, you can set goals, and save so that you have the ability to invest.  Once you have $10 to $20k, you can invest. But if you never have the savings, you will never have the resources needed to invest.
  • Focus: Learn one asset at a time.  There are an unlimited number of options to invest in; Stocks, Bonds, Currency, Real Estate, Precious Metals, etc.  To experience the upside of any market, you have to focus and learn the asset, and how you can make money without a high degree of risk.  Budget your time to learn the asset.  
  • Action: In order to gain experience, you have to take action.  Once you have learned the asset, built a plan that you can execute easily, you have to take action.  Without action, all of the efforts are for not.  

BIGGEST RISK 

Each week I ask my guest, “What is the Biggest Risk Real Estate Investors face?”  

BIGGEST RISK: Investing with the wrong people.  If you work with good honest people, you have the best chance of coming out ahead.

Technology is changing real estate.  Amazon has totally changed the retail real market.  3-D printing is changing construction. How will it change the cost and opportunity to build a building?  What about the goods that are currently manufactured, and warehoused waiting for you to order? Will the demand for warehouse space decrease due to the use of 3-D printing?

For more go to:

Linkedin: Dovid Preil

Website: www.ydlpinvestments.com

Email: dovid@ydlpinvestments.com

Oct 29, 2019

Darrin: [00:00:08] Dovid Preil, What is the BIGGEST RISK risk? [00:00:11][2.9]

Dovid: [00:00:11] In what, real estate? [00:00:14][2.8]

Darrin: [00:00:15] Real estate or investing, real estate investing? [00:00:18][2.4]

Dovid: [00:00:19] Real estate, again, this is real estate investing in real estate itself. I think the more interesting answer or practical answer is, is, is investing. And that's the BIGGEST RISK is going in with the wrong people. You know, anything can happen. And if you're working with good, honest people, you're the best chance of coming out ahead. I think the more interesting answer, though, is, is what what the biggest risks real estate is. That's a topic, which I find to be fascinating, because I think the answer is technology and all the advances we've had in technology and we're having. I think that that poses a very, very interesting longer term thesis to see how it plays out with real estate. It's fascinating to me. Just for example, you don't live very far. The fact that everyone thought as of a couple of years ago or even their people that I speak to today, they think that retail is going to die because of Amazon. That's just an example how where technology like completely upended an entire major sector and it's transformed it. And I think I have I have a lot of faith in retail. I think the numbers speak to that faith. And they they back it up. But it but it's changed. Retail had to really adjust and change how it operates because of that. And I'm seeing stuff coming down the pipeline technology and I'm very into technology by day. I work for a very advanced fintech company. Doing some pretty groundbreaking stuff. And I think that by training on a program are actually and I think technology is incredible what it's doing. And the advances that are being made in things like autonomous vehicles and 3D printing, both in terms of 3D printing, housing and 3D printing goods. You know, I'm going to go out I'm going to be a little bit futuristic here. But, you know, if you can 3D printer house next to a town that you want to live in for. To with all in with the land and everything, for two thirds the cost and existing units, what's that going to do to the cost, the value of real estate? And you can you know that that's that's I mean, it's not happening tomorrow. But those are the kind of questions that I ask myself or like what happens to warehousing when I can just buy a 3D printer and just print the product? You know, I'll just go. And that's kind of like this is super futuristic, but I just like go to a company and I press a button and like their specs, go to my printer, just prints out the device for me that I want to buy. You know, there's a lot of interesting things happening here. There are things that are going to be that they're going to be talking about in 10 years that don't even exist today. You know, it is changing the market. It is so interesting. [00:00:19][0.0]

[8.0]

Oct 24, 2019

Cost Segregation is a tool given by the tax code to real estate investors that improves cash flow instantly. 

Jodi Nielsen, National Senior Account Manager & David Deshotels, Executive Vice President of Cost Segregation Services Inc provide real estate investors with the how and why they can utilize the tax code to lower their taxes, save money, improve cash flow.  

FREE: TAX SAVINGS COST ANALYSIS 

Cost Segregation Study

Cost Segregation Study takes an engineering approach to determine what the components of the building are.  Then, it breaks the whole building into its components parts. These component parts are then categorized as personal property, and assigned a life expectancy of 5, 7 or 15 years.  

Depreciation

Depreciation is the accounting of a portion of the whole that has been used up, and is loss.  This loss reduces its value and is accounted for annually when filing income taxes. It is an expense against income.  Subtracting this depreciation expense from income reduces your taxable income.  

Straight line vs Accelerated 

Start with a value of $100,000

Pre Tax income of $20,000

 

Straight line:

27.5 years: $100,000 / 27.5 = $3,636 annual depreciation expense.

 

Taxable income: $20,000

Depreciation: - $3,636 

Taxable Income: $16,364

 

Accelerated Depreciation:

5 years: $100,000 / 5 = $20,000 annual depreciation expense.

 

Taxable income: $20,000

Depreciation: -$20,000

Taxable Income: $      0

This shorter timeline accelerates the depreciation and increases the depreciation expense, which lowers the Taxable Income and increases cash flow.  

The net result can be tax free income for the real estate investor.  This is especially true in the early years of ownership. This is one of the primary incentives for investors to hold real estate.  

Bonus Depreciation

Bonus Depreciation used to be available only for buyer or builder of a new property.  The new tax laws allow you an additional 100% depreciate any eligible property if it is new to you.  This adds to the value of a cost segregation study.   

Partial Asset Disposition

Partial asset disposition allows you to take into account and write off the loss of the unused property when you replace elements of your building.   For instance, if you buy a building and have to replace the carpet. If you expense the cost of the new carpet, you will get to record the expense of the new item, but will not get the benefit of the unused property that you tossed in the dumpster.  

Additionally, if you have not done a Cost Segregation study, you will miss out on the additional depreciation allowed in the 2017 tax act.  Bonus Depreciation provides an additional amount of depreciation for qualifying property in year one of purchase.  

Tax Payor Status

Your tax payor status will determine how much depreciation you are allowed to use.  

Real Estate Professional

For those investors who are full time investors and do not have a W2 job, they can utilize the depreciation against 100% of their gross income. 

Passive Real Estate Investor

If you are a passive investor, and have a W2 job, you are allowed to deduct up to the amount of passive income received.  If you have more deductions than you can take, the deductions will be carried forward for future use. This can be used to offset the taxable gain when you sell the property.

Misconceptions of Cost Segregation

There are some common misconceptions around cost segregation.  Following are a few:

Misconception: I can’t do a cost segregation study on my old building.  

FACTS: This is not true.  As long as the building is new to you, you are eligible to utilize cost segregation.

Misconception: My building is not worth enough to utilize cost segregation.

FACTS:  As long as your building is worth $150,000, cost segregation may be of benefit to you.

When Not to Use a Cost Segregation Study

A cost segregation study will not work for you if you are a non profit that does not pay taxes.  Additionally, if you are looking to flip a property in less than 3 years, it may not be worth doing a study.  

The recapture rate of Personal Property can be negated if planned for properly.  If you exchange into a new building, the Personal property recaptured, will be calculated at a higher rate than the permanent structure.  However, if you do a cost segregation study on the new property, you will have a new schedule of depreciation plus the bonus depreciation in year one.  

BIGGEST RISK 

Each week I ask my guest, “What is the Biggest Risk Real Estate Investors face?”  

BIGGEST RISK:  

Per Jodi:  The biggest risk is you're sitting basically if you own a building you definitely owe it to yourself op to look at. Because you're sitting on cash that you don't have to sell another widget. You don't have to make another widget. You don't have to find another contract. It's your money that you're just basically sitting on by owning a building that you could use now. And so why not at least look at the look at the numbers to see if it makes sense for you at this time instead of letting more time go by just straight lining. And then also with the partial asset disposition I would say it's very important to take advantage of it.

Per David:  We've had plenty of companies that have called us back years after having done their study. And they suffered catastrophic loss be it a tornado or fire or whatever it is and they won't say, do you guys still have those 500 pictures of my building that you took when you did the study? It's like sure we've got those and it's so we have they're building just completely documented from top to bottom one in the other. We'll come out and take hundreds and hundreds of pictures depending on the size of the property to completely document that. So if there is catastrophic loss it's it's a documentation to say hey here's what the building was. Here's all the furniture fixtures and so forth. And it's been very helpful to people in times of crisis.

For more go to:

Jodi Nielsen

Phone: 651-210-1921

Email: jodi.nielsen@costsegregationservices.com

David Deshotels

Email: david@costsegregationservices.com

Oct 22, 2019

Darrin:  Jodi Nielsen and David Deshotels, what do you see is the BIGGEST RISK? [00:00:15][6.9]

Jodi: [00:00:18] I'll start and I'll let David finish if he wants to add. I'd say the biggest risk is you're sitting basically if you own a building you definitely owe it to yourself op to look at. Because you're sitting on cash that you don't have to sell another widget. You don't have to make another widget. You don't have to find another contract. It's your money that you're just basically sitting on by owning a building that you could use now. And so why not at least look at the look at the numbers to see if it makes sense for you at this time instead of letting more time go by just straight lining. And then also with the partial asset disposition I would say it's very important to take advantage of it. Even if your business let's say is not even making money this year but you're doing a bunch of renovations. If you don't take advantage of it this year you're going to lose it. So if you're not I mean you're not going to take advantage of the opportunity of taking personal asset disposition. You will get the money and you won't lose it. So next year if your business is making more money or the year after whatever, it is going to be sitting there waiting for you. So you know, time is always you know time value money. That's kind of what we're about. And so the sooner you look at what makes sense for you as a business owner or building owner the better off you are. David, anything to add? . [00:01:43][85.1]

David: [00:01:43] Sure it's one of the advantages of having a cost segregation study that we don't usually talk about since we're. Since you're an insurance broker, Darrin. Is we've had plenty of companies that have called us back years after having done their study. And they suffered catastrophic loss be it a tornado or fire or whatever it is and they won't say, do you guys still have those 500 pictures of my building that you took when you did the study? It's like sure we've got those and it's so we have they're building just completely documented from top to bottom one in the other. We'll come out and take hundreds and hundreds of pictures depending on the size of the property to completely document that. So if there is catastrophic loss it's it's a documentation to say hey here's what the building was. Here's all the furniture fixtures and so forth. And it's been very helpful to people in times of crisis.

Oct 17, 2019

How to extend your building roof life is a value add topic for all real estate investors.

Building owners with composition shingle roofs, Dennis Ghormley with Roof Maxx explains how to extend your roof life and receive a 5 year transferable warranty. 

History of Composition Roof Shingles

The history of composition roof shingles begins with the raw materials.  The shingles are a petroleum based product. Originally, they were made from waste product of the oil refining process.  Over time, oil processing has become more efficient and so has reduced the amount of waste byproducts. That’s good for the environment and the oil business profits, but not for the composition roof shingles.

The improvement in oil refining lessened the quality of composition shingle, so much that the roofing manufacturers had to start with raw crude oil in order to create a finished product that would last as long as prior products.  

Unfortunately, the concentration of raw material used for roofing shingles is lessened when unable to start with the byproduct.  Because the new roofing raw product started with a pure raw material instead of a waste product, the cost of the material and the end product naturally increased.  

Cost of Capital Improvement

Capital improvements are just a part of owning property.  The substantial cost of capital improvements requires property owners either inject additional capital into the property or reduce cash flow distributions to pay for the improvements.  

How to Extend Your Building Roof Life

Roof Maxx is the manufacturer of the all natural, soy-based, environmentally safe product that is sprayed onto your composition roof.  The product penetrates your old shingles and gives them improved flexibility and the ability to keep your building’s roof free from leaks. 

Depending on the condition of the roof, age, pitch, etc, will depend on the potential outcome from a Roof Maxx treatment.  Ideally, a property owner treats their composition roof in the first 5-7 years. The expected roof life of a composition roof can be extended from 5 to 15 years depending on when the roof is first treated and the number of subsequent treatments.  The treatment comes with a 5 year transferable warranty.   

Cost to Extend Building Roof Life

The cost to extend the building roof life when applying a treatment of Roof Maxx is significantly less than the cost of a new roof.  Typical treatment cost between 10-15% of the cost of a new roof. The product is relatively new to the market, but has been very well received.

Roof Maxx will not save every roof, but for those that qualify, the 5 year transferable roof warranty will provide the buyer confidence that the roof will last at least 5 years from the date of application.  The cost savings of a treatment versus a roof replacement can buy the property owner time to budget for a replacement, or to transact the sale of the property.

Environmental Benefits of Extending Roof Life

The environmental cost of re roofing is not small.  By extending the roof life of your building, you are reducing the consumption of wood and petroleum products required to reroof a building.  Additionally, you are eliminating the disposal waste that is added to landfills when you reroof. Annually, it is estimated that over 10 million tons of roof material is kept out of landfills by the usage of Roof Maxx.

BIGGEST RISK 

Each week I ask my guest, “What is the Biggest Risk Real Estate Investors face?”  

BIGGEST RISK: The longer a roof is on the structure, the more risk that that property owner has. If we can keep the roof on the property longer, and mitigate the risk of leaks and other issues that come from the failing roof and also the risk to the environment where we can keep the roof waste out of landfills.  

For more go to:

https://www.roofrc.com/

dghormley@roofmaxx.com

(503-766-3729) and (360) 207-4572

 www.roofmaxx.com

Oct 15, 2019

Dennis Gormley what is the BIGGEST RISK? [00:00:11][0.0]

Well that's a great great question because. Basically from from my perspective from the from the Roof Max perspective is the longer a roof, is on the structure the more risk that that property owner has. And I'm going to answer actually in two different ways one from the property owner and then also from my perspective is. If we can keep the roof on the property longer, that mitigates the risk of leaks and other issues that come from the failing roof and also the risk to the environment where we can keep the roof waste out of landfills. That's a huge risk to our environment that we don't we keep on throwing stuff away. We're going to run out of. And from a from a Roof Max business perspective, you know, I really believe in this product the service adds add something that just it's never existed before. And the longer that the BIGGEST RISK I have is not being action oriented enough having mass massive action to get the word out to educate people then that just means that more people are running a risk of making decisions that you know they just don't have all the information. I'm all for having all the information possible. Eventually have to make a decision, but there's,. there's just that perspective of having information that helps make informed decision.

Oct 10, 2019

Passive Investing in Multifamily Syndication is ideal for any investor who lacks the time or interest in dealing direct with the challenges but seeks the benefits of real estate. 

James Kandasamy was trained as an engineer, but is now a full time real estate investor.  He started investing in what he knew, single family homes. But, soon he realized the difficulty to scale when investing in single family homes.  First, the lenders cap the number of loans you can have at 10. In order to grow beyond this arbitrary limit, you have to get creative and either put some loans in your spouse’s name, or get a commercial loan.  

Then you have multiple locations, which require multiple regular trips to check up on your properties.  Don’t forget your insurance policies, which typically will have a separate effective date and bill for each property.  All of this makes it difficult to grow and scale your portfolio. His desire to grow and scale caused him to give up on single family and pivot to multifamily.

Markets

Real estate has a physical location, so determining where to invest is important.  Some investors make a science out of determining where to invest, while others invest in their backyard, because they know the neighborhood.  

James is physically located in Austin, TX, where the current growth rate is 150 new people arrive each day.  Texas has no state income tax and is attractive for employers. The pro business attitude is attracting tech companies and start-ups, which hire and attract millennials.  The question of where to invest was a simple for James to answer. He knows the local area, and that it is growing, which equals demand for housing and specifically, multifamily real estate.   

Value Add 

 Value Add strategy is when you buy a property and positively change the net operating income, which increases the value of the property.  There are many different ways to increase the value of the property, from simple to involved.  

The strategy you chose is usually determined before you purchase the property during due diligence.  This is where you are able to look at the sellers numbers and operation and determine what needs to be done to increase the value.  A simple case may be just raise the rents to the current market rate. The more involved strategy will likely include significant renovations, or rebranding to breath new life into the property and attract residents willing to pay more.    

There are multiple real estate investment strategies you can employ.  One benefit that commercial real estate has over single family is the ability to directly affect the value of your property, regardless of your neighbors.  Repositioning a property to increase its value, is the strategy that is referred to as “Value Add”. 

Operational Expenses

Operational expenses are key to determining the value of your property.  James company, Achieve Investment Group has a distinct advantage as a vertically integrated company.  They provide property management, asset management and construction management all in house. The three disciplines allow them to quickly identify opportunities to add value. 

Property management is able to quickly review the operation expenses and identify any numbers that are suspect.  Suspicious number are most evident when the seller uses a third party management company. The vertical integration model provides James and his investors with additional, direct control.  James has found that inside management typically saves him and his investors around 10% on expenses.

If you are not vertically integrated, you can partner with other providers like a property management firm to help analyze the operations of a property you are considering for purchase.  

Mismanagement is very common, and easy to fix with the right team.  For the management professional who is familiar with the asset class and market, they can easily identify expenses that are either unnecessary, or out of control.  This can significantly improve your net operating income.   

Capital Expenses

If your value add strategy involves significant renovations, these will require additional capital.  How much capital is determined through your contractor estimates based on what your vision for the property is.  It is critical to have a well defined plan, budget and timeline so that you can raise the amount of money you will need to create the value you are projecting.  Your passive investing investors will expect you to hit your numbers.  

Passive Investing

Achieve Investment Group controls over 1300 units in central Texas.  All of these units have been acquired through syndication. In order to acquire so many units, James has networked with accredited investors.  

James wrote  Passive Investing in Commercial Real Estate to help educate investors on what to look for when selecting a passive investment.  Selecting the deal sponsor is key, and finding one that you can trust is the most important.

Passive investing with accredited investors provides the syndicator, Achieve Investment Group, with needed capital.  The investors get the opportunity to reap the rewards of real estate without having to be actively involved in the acquisition and daily operation of the property. 

The typical hold time for an investment property that Achieve acquires is 5 years.  This allows the time needed to improve the property and positively affect the improvements.  A year of market rate rents in the improved property provides the financial proof of value needed for sale.  When investing passively, investors look for capital preservation, positive return, and the return of their investment capital. 

Keys to Successful Value Add

The keys to executing a successful Value Add strategy start with the purchase.  It cannot be stressed enough, that in order to have a successful deal, you have to “Buy Right”.  Failure to buy right will make your impede your success. You have to buy right.

Next, you must operate the property in a way that maximizes the value.  If your due diligence revealed, low rents, or high expenses, it is up to the property management and asset management to correct and improve the property value.  

This includes training your tenants.  If prior management allowed slow payment, and did not enforce the lease, your management will have to set the new tone early and guard against the tenant training management.  

A successful track record of acquiring, repositioning, selling and providing positive returns to passive investors will attract additional investors.  Passive investing for the investor is based on the ability to trust the deal sponsor. A sponsor with a proven track record, will be more appealing than one without success.  

Benefits of Passive Investing in Real Estate

Passive investors can lower their tax liability when investing in real estate.  The US tax code is pro real estate investment.  

Tax Benefits of passive real estate investing are impressive.  Positive cash flow from a passive commercial real estate investment is off set by the three deductions; depreciation, mortgage interest and the loan cost.  

  • Depreciation is an annual percentage of the building value that is lost through use.  This is an accounting exercise that is calculated and claimed when you file your taxes.
  • Mortgage interest currently is an expense that can be deducted when filing taxes.
  • Loan fees you pay when obtaining a mortgage are an expense you can deduct when filing your taxes.

At year end, the sponsor, or syndicator, will provide you with a K1 to use when filing your taxes.  The K1 will show both income and deductions. Most likely, the deductions will exceed the income in the early years of your investment.  The unused deductions are not lost, but rather carried forward and can be used to offset the capital gain and depreciation recapture due at sale of the property.  

BIGGEST RISK 

Each week I ask my guest, “What is the Biggest Risk Real Estate Investors face?”  

BIGGEST RISK: I think the BIGGEST RISK, is not doing due diligence properly either on the physical property inspection or even on the you know the business plan right. To make sure your business plan is correct. Because when you buy a deal we always have to make sure that we understand everything about the deal. We're buying multi multi-million dollar deal that we are syndicating we have passive investor money in the line. Our money is on the line and we want to make sure that we do as much due diligence as possible. So, that because it is our list that I fear is always likely did I miss out something. I'm always checking and checking and checking and double checking triple checking and making sure that I know everything that I do.

For more go to:

Website: Achieve Investment Group

Email: james@achieveinvestmentgroup.com

Podcast: Achieve Wealth Podcast

Face Book: Multifamily Investors Group

Linkedin: James Kandasamy 

Book: Passive Investing in Commercial Real Estate

Oct 8, 2019

Darrin: [00:00:08] James Kandasamy, what is the BIGGEST RISK? [00:00:11][3.6]

James: [00:00:11] I think the BIGGEST RISK, is not doing due diligence properly either on the physical property inspection or even on the you know the business plan right. To make sure your business plan is correct. Because when you buy a deal we always have to make sure that we understand everything about the deal. We're buying multi multi-million dollar deal that we are syndicating we have passive investor money in the line. Our money is on the line and we want to make sure that we do as much due diligence as possible. So, that because it is our list that I fear is always likely did I miss out something. I'm always checking and checking and checking and double checking triple checking and making sure that I know everything that I do. And and a lot of times this is being mitigated by our lender because we usually get like Fannie or Freddie and they do another round of checking. They do another on underwriting and they do another round of inspection on top of we are doing right. But that's also risk when you go and take other smaller loans like community bank loans and normal loans because they're not as thick as what the agencies are. And because they're not being straight they may keep out things and we as a sponsor may be maybe stuck with something that we should have done. I mean you are alone in that case right. The lenders are not doing their due diligence you are alone. So I think people who have no known agencies loan or a lender which doesn't really stress on the on the inspection side of it and you want to be very very careful and you wanted to double triple check on your own. Because, you can you can end up you know with a big loss if you found something that you didn't expect.

Oct 3, 2019

Change your mindset, build your network and grow your multifamily portfolio.   Simple, right? Learn how Jens Nielsen did just that and grew his multifamily portfolio to 600 units in less than 4 years. 

Jens Nielsen immigrated to the US from Denmark and plugged into the economy doing all the prescribed things responsible adults do; get an education, a job and save for retirement.  He and his wife currently reside in beautiful Durango, CO, where he is able to pursue his passion of cycling. Jens had a good IT job, but was not satisfied with the returns from the stock market.  He realized he was building wealth for others, but that his own financial future seemed less certain.  

His questionable future, led him to consider other possibilities.  Where could he change the outcome and improve his future so that he could be assured of the financial freedom he sought?  His search quickly lead him to real estate. Then he found the power of multifamily real estate.   

But how Jens the IT guy attract investors to invest with him in multifamily real estate?

Building Your Network

Building  your network is key if you eventually expect to invest with others.  You may think you want to go it alone, but quickly you will realize that in order to truly reach your goals, you will need others.  So if you accept that you will need others to help you grow your real estate portfolio, the next question is are you building your network?  

If not, why not?  Are you stuck? Where should you start?  These are the conscious questions you have to ask yourself when you decide to build your network.  

Why Build Your Network

Why build your network?  If you are a person of action, and you are truly committed to actively investing, your actions will lead you to real opportunities.  When that day comes, will you be able to take advantage and close the deal? If you have built your network, and you are trusted, you are halfway home.  

How to Build Your Network

The easy way to start building your network is to tell others what you are doing.  Jens had a group of friends he cycled with. It was in this group, where he shared about his investing experience.  Each time they got together for a ride, the opportunity to share what he was doing in real estate just happened. As the group members followed Jens journey, their interest and curiosity grew.  Jens asked members of the group if they would be interested in investing with him when he found a new opportunity. The conversation naturally lent itself. If followed a progression of enthusiasm generated interest from supportive friends because he was sharing what was going on in his life.    

Next, he reached out to his network, and started scheduling coffee meetings, etc,  In each meeting, he would ask if the person was interested in hearing more from him about his investing journey.  The meetings made him realize that others he knew could be interested as well in learning about the opportunities in multifamily real estate.  

So, he emailed his list, and offered the opportunity to receive his periodic updates as he learned more.  He sent the email, and over time, the subscriber list grew. Each month, he learned something new and shared it with his list.  His consistent action demonstrated to his readers over time, that he knew the topic well. All of this sharing gave his readers a level of trust in him. 

Is There Anyone You Know That I Should Know?

You are working to build your network and meeting with a lot of people.  Before the meeting ends, ask the question, “ Is there anyone you know that I should know?”  This makes them think, and will plant a seed for later to connect you with others providing the best warm introduction, referral.  

His Network Answers: Where to invest?

Where to invest your friends and family’s money is not a question to take lightly.  A member of Jens cycling group referred him to a commercial real estate broker in Albuquerque.  The introduction led Jens to visit and confirm that Albuquerque was a good opportunity, which he shared with his network.  Each time he purchased a property, he shared the details with his network, which continued to feed their growing curiosity about the investment opportunity in real estate. 

Location, location, location is rule number one for real estate investing.  Most people think this means the street address, or which side of the street the property is located on.  Experienced investors will start with the market fundamentals.  

The market is a reflection of jobs, population growth, median income, crime, etc.  In the market, you need to be aware of the path of progress. If all the location questions are not answered in the affirmative, it can be the difference between an average investment and a home run.  

Investing with Others

Investing with others is a journey.  First he invested passively in other sponsors deals.  Next he invested on his own. Then he did a joint venture with others.  Each new successful deal, built his resume of credibility. Now his investors, know him and his story, and are comfortable with the idea of investing in real estate.  

Today, Jens works with a mentor and regularly attends real estate investor conferences where he networks with other like minded investors.  His network has allowed him to raise millions of dollars for multifamily syndication. And now Jens is ready to sponsor a syndication.  

It took some time, but he was able to change his mindset.  He got educated, and shared with others what he learned. His willingness to take control of his financial future required that he look at the world differently.  Yes, there were some missteps, but soon others saw Jens and recognized he was different. He was no longer just Jens as just the IT guy. Now they know him as Jens the Real Estate Investor because he did the work and shared his journey with others looking for the same thing he sought; a secure financial future.   

Remember, it takes time, so don’t wait to start.  The sooner you start sharing with others what you are learning about real estate investing, the quicker you will be able to find the financial freedom you seek from real estate investing.

BIGGEST RISK 

Each week I ask my guest, “What is the Biggest Risk Real Estate Investors face?”  

BIGGEST RISK: Not taking action.  If you live in fear, and never take action, you will never grow.  Life is about the journey, take the risk. There will always be reasons to not move forward.  Find the reason to go forward.

For more go to:

Email: jens@opendoorscapital.com

Website: https://opendoorscapital.com

Schedule a call: https://opendoorscapital.com/call/

Oct 1, 2019

Darrin: [00:00:08] Jens Nielsen I'd like to ask you, What is the BIGGEST RISK? [00:00:12][4.3]

Jens: [00:00:14] Yeah. And I know we kind of talked about before we start recording you know obviously all those real risks out there that you have to deal with. And I don't think I don't necessarily want to go into that. I like to kind of maybe a person from a more esoteric standpoint. I think the biggest risk that anybody, we all have our lives is not taking action. We are afraid of the unknown. We are afraid of what can possibly go wrong. So we just stay with what's comfortable in our lives. And we just never change. We like, I'm gonna go to work every day. I'm gonna go home and gonna to watch TV and I'm gonna go up and do it tomorrow again. And if that's all you do, your risk is you don't take action you're never gonna break out of that and you never grow as a human being. And I think if you aren't growing you are dying or what are we gonna call it right. So taking action is just the biggest thing. Yeah. You're gonna get your nose bloodied you're gonna make mistakes you're gonna you're gonna maybe lose some money. But in the end, right, the life is about the journey about the experiences we have and moving forward every day. And that's that's kind of I think that's the BIGGEST RISK we all have is not taking taking action when we see that there is an opportunity out there. And without seeing a path, the time is never gonna be right. There is always be something that some excuse you can find but just take action you know. Today is the best day to take any kind of action. So that's my answer to that question. I know that's similar to this you've gotten. [00:00:14][0.0]

1